Experts Project 2010 Ad Spending and Future Trends

Posted on 12/11/2009 by Jim Pickerell | Printable Version | Comments (3)

ZenithOptimedia (Publicis) says that global ad spend for 2009 will be 10.2% compared to lower than 2008, but that in 2010 it is expected to be up 0.9% compared to 2009. Group M (WPP) thinks 2009 spending will only be down about 6.6% from 2008 levels and expects 2010 to be 0.8% above 2009. There is no expectation that ad spending will get back to 2008 levels anytime soon.

Historically, such companies tend to make their most favorable estimates for the coming year in December. Revised April estimates tend to be down a little. By July, the estimates are down more, and by October, the even-lower estimate is usually close to what the real number turns out to be. Hence today’s 2010 estimates are probably optimistic.

Compared to the U.S., global estimates can be considered good news. ZenithOptimedia expects 2009 American ad spend to drop 12.9% compared to 2008, and the decline will continue by a further 2.6% (compared to 2009 levels) in 2010. Group M has the U.S. falling 8% this year and projects 2010 decline to be a further 4.3%.

In addition, both agencies expect ad sales at traditional media to drop further and faster than the overall figures would indicate as more of the total spend is diverted to digital. And that’s not only for 2010. ZenithOptimedia says that within the next five years or so Internet ad revenue – based primarily on search – will overtake newspaper ad revenue.

ZenithOptimedia: Global advertising expenditure estimate, 2008–2011 (US$ millions)

Media type

2008

2009

2010

2011

Newspapers

123,229

115,491

114,038

114,717

Magazines

55,754

54,130

54,915

55,975

Television

184,487

185,447

196,818

207,886

Outdoor

32,662

33,506

35,819

38,244

Internet

49,876

58,703

71,213

84,145

Note what is happening in the magazine business and remember that publishers tend to raise their ad rates to offset declining demand for ad pages, so level dollars actually represent fewer ad pages. While newspaper advertising dollars are on a level track, remember that most papers in the U.S. are already in crisis and cutting back on editorial content due to declining ad pages. Also, newspaper advertisers have never been big users of stock images, because most newspaper ads tend to use product shots.

Television revenue is more than newspapers and magazines combined. It is expected to grow, but much of that growth will be with the local cable operators, not the networks. Does video stock have more potential than stills? Will those who advertise with the local cable operators be looking for the same type of clips that have been traditionally used by the networks or will they want an ad that is shot start to finish at their locations?

And then there is the Internet, where advertising revenue is expected to be up 69% in 2011 compared to 2008. At the rate it is climbing, it should easily exceed newspaper advertising revenue by 2013 or 2014. A huge portion of that revenue is for Internet search, which makes no use of pictures. When pictures can be sold for Internet ads, the fees paid are a fraction of what is paid for print ad use.


Copyright © 2009 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

Comments

  • Yva Momatiuk Posted Dec 11, 2009
    Jim,

    You wrote:

    ZenithOptimedia (Publicis) says that global ad spend for 2009 will be 10.2% compared to 2008

    I think you meant:

    ZenithOptimedia (Publicis) says that global ad spend for 2009 will be 10.2% less compared to 2008

    Yva Momatiuk

  • Jerry Kennelly Posted Dec 14, 2009
    Jim, can you explain a little more about what you mean when you say " When pictures can be sold for Internet ads, the fees paid are a fraction of what is paid for print ad use." in the very last paragraph? I am not sure i understand what you mean regarding the comparison for print ad use? thanks Gracie

  • Jim Pickerell Posted Dec 17, 2009
    The fee for many of the traditional images licensed for online use alone, regardless of how they are being used, tends to be $49 or less. Then we also have the increasing use of microstock images for online advertising uses. The kind of fees traditionally paid for RM images used in print advertising, and even traditional RF fees for large file sizes, are seldom seen when the only advertising use is online. When the same image is used in print and online there is usually very little, if any, additional charge for the additional online use.

    We also need to keep in mind that the space rates advertisers are paying for placement of their ads online tend to be one-tenth, or less, of the amount they pay for one placed in a printed product with the same exposure. When they place such a lower value on an online ad compared to one used in print they tend to expect that the cost of producing that online ad will be less.




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